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How to Pay Remote Workers

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Re: How to Pay Remote Workers

#21

Post by oAlbe »

cyborgx7 wrote: post #16
gjulianm wrote: post #4

Salaries based on cost of living are always a mistery to me. If the company wants to have an honest relationship with the worker, the salary should be based on the value the employee is bringing, and that does not depend on where they live. Tying the salary to the cost of living looks like a way to cheat a worker out of the value they generate.

>Tying the salary to the cost of living looks like a way to cheat a worker out of the value they generate. Where do you think profits come from? Profit is the difference between what you pay your workers and the value of their work.

That's not the point though. Having an honest relationship with your employees and treating everybody fairly doesn't prevent you from profiting.

It think this point is explained really well in the article: why should someone who lives in a city with a high cost of living be paid more than someone who lives in a low cost of living one? Effectively, what you are doing is giving the person in, say, SF, more money to be able to afford a better lifestyle than the person in rural Ohio (to use the same example of the article). Why is that fair? And also, if that is fair, then is me moving to live on a yacht in Montecarlo a reason for the company to pay me 500k a year to afford that lifestyle?

Workers should be paid fairly. And to do that you have to pay everybody the highest salary you are paying for that position. I think Stackoverflow does that now, I remember reading an article on their blog about it.

Re: How to Pay Remote Workers

#22

Post by jon_remote »

romanovcode wrote: post #7

> Why on earth would it matter where your desk is? It matters to product managers. Managing remote team is more difficult therefore PMs will always push against this.

Product manager feels like he/she needs to micromanage 9-5 standing next to your desk? Sounds like someone is trying to do or justify a job that is not really needed in 2019.

You could easily manage people in distributed teams and a lot of companies are doing that. How else you manage a team in a company that is operating in 5-10-20-30 countries? :-D

Re: How to Pay Remote Workers

#23

Post by dustinmoris »

cyborgx7 wrote: post #16
gjulianm wrote: post #4

Salaries based on cost of living are always a mistery to me. If the company wants to have an honest relationship with the worker, the salary should be based on the value the employee is bringing, and that does not depend on where they live. Tying the salary to the cost of living looks like a way to cheat a worker out of the value they generate.

>Tying the salary to the cost of living looks like a way to cheat a worker out of the value they generate. Where do you think profits come from? Profit is the difference between what you pay your workers and the value of their work.

No value comes from many different reasons and one of those is a new value generated from the combination of efforts of many individual contributors. The individual value which someone brings doesn't equal the end value which is being delivered to a customer. The essence of a business is generating new value to end consumers which an individual couldn't do on their own.

Re: How to Pay Remote Workers

#24

Post by biblytens »

gjulianm wrote: post #4

Salaries based on cost of living are always a mistery to me. If the company wants to have an honest relationship with the worker, the salary should be based on the value the employee is bringing, and that does not depend on where they live. Tying the salary to the cost of living looks like a way to cheat a worker out of the value they generate.

Salaries are based on supply and demand. Think this one through with that in mind and it'll make more sense.

Re: How to Pay Remote Workers

#25

Post by cyborgx7 »

dustinmoris wrote: post #23
cyborgx7 wrote: post #16

Earlier quoted context omitted.

>Tying the salary to the cost of living looks like a way to cheat a worker out of the value they generate. Where do you think profits come from? Profit is the difference between what you pay your workers and the value of their work.

No value comes from many different reasons and one of those is a new value generated from the combination of efforts of many individual contributors. The individual value which someone brings doesn't equal the end value which is being delivered to a customer. The essence of a business is generating new value to end consumers which an individual couldn't do on their own.

The extra value generated from the combination of efforts is still generated by the workers who combined their effort to generate it. Why are the owners more deserving of that "extra value" than the workers?

Re: How to Pay Remote Workers

#26

Post by jdnenej »

oAlbe wrote: post #21
cyborgx7 wrote: post #16

Earlier quoted context omitted.

>Tying the salary to the cost of living looks like a way to cheat a worker out of the value they generate. Where do you think profits come from? Profit is the difference between what you pay your workers and the value of their work.

That's not the point though. Having an honest relationship with your employees and treating everybody fairly doesn't prevent you from profiting. It think this point is explained really well in the article: why should someone who lives in a city with a high cost of living be paid more than someone who lives in a low cost of living one? Effectively, what you are doing is giving the person in, say, SF, more money to be…

A reason I was told is that if you pay the same rate everywhere then someone in a 3rd world country could hate the job and be not very motivated but won't quit because it pays more than any other job.

Re: How to Pay Remote Workers

#27

Post by spurdoman77 »

gjulianm wrote: post #4

Salaries based on cost of living are always a mistery to me. If the company wants to have an honest relationship with the worker, the salary should be based on the value the employee is bringing, and that does not depend on where they live. Tying the salary to the cost of living looks like a way to cheat a worker out of the value they generate.

So, how do you calculate value for developer?

Re: How to Pay Remote Workers

#28

Post by spurdoman77 »

oAlbe wrote: post #21
cyborgx7 wrote: post #16

Earlier quoted context omitted.

>Tying the salary to the cost of living looks like a way to cheat a worker out of the value they generate. Where do you think profits come from? Profit is the difference between what you pay your workers and the value of their work.

That's not the point though. Having an honest relationship with your employees and treating everybody fairly doesn't prevent you from profiting. It think this point is explained really well in the article: why should someone who lives in a city with a high cost of living be paid more than someone who lives in a low cost of living one? Effectively, what you are doing is giving the person in, say, SF, more money to be…

But as an employer, why I should strive for honestness? Does it bring me more profit? To me it sounds like paying too much. I pay market rates which doesnt consider cost of living or value produced, but the the average salary for the skillset/experience.

Re: How to Pay Remote Workers

#29

Post by spurdoman77 »

jdnenej wrote: post #26
oAlbe wrote: post #21

Earlier quoted context omitted.

That's not the point though. Having an honest relationship with your employees and treating everybody fairly doesn't prevent you from profiting. It think this point is explained really well in the article: why should someone who lives in a city with a high cost of living be paid more than someone who lives in a low cost of living one? Effectively, what you are doing is giving the person in, say, SF, more money to be…

A reason I was told is that if you pay the same rate everywhere then someone in a 3rd world country could hate the job and be not very motivated but won't quit because it pays more than any other job.

I can tell you these unhappy unmotivated overpaid people are everywhere. It is fairly easy to overcompensate and it can be quite a problem.

Re: How to Pay Remote Workers

#30

Post by tom_mellior »

goatinaboat wrote: post #10
reportgunner wrote: post #5

Earlier quoted context omitted.

Where will the extra money come from ?

There are costs associated with working in an office - consider rent, cleaning, furniture, power, a receptionist, maybe an entire facilities management department, security and so on. These costs are split amongst the revenue earned per worker in that office. But homeworkers provide all those things for the company “for free”. And even more the homeworker might even provide the PC, the phone line, any tech support th…

Both remote employers I've had so far have paid me a monthly lump sum for my internet connection (covering more than the actual costs). And I've always had a company PC. You're right about rent etc. though.
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